Answer (A) is correct . When the internal audit activity or an individual internal auditor is responsible for, or management is considering assigning, an operation that might be the subject of an engagement, independence and objectivity may be impaired. The internal auditor should consider the following factors in assessing the effect on independence and objectivity:? The IIA Code of Ethics, the Standards , the expectations of the stakeholders, the internal audit activity’s charter, required disclosures, and subsequent coverage of the activities or responsibilities accepted (PA 1130.A1-2).
Answer (B) is incorrect because Budget restrictions do not constitute an impairment of independence.
Answer (C) is incorrect because An internal auditor may recommend standards of control. However, designing, installing, drafting procedures for, or operating systems might impair objectivity (PA?1130.A1-1).
Answer (D) is incorrect because An internal auditor may review contracts prior to their execution.
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